The Sri Lankan government is set to hold an inquest into the creation and operations of Mihin Lanka (MJ, Colombo Int'l), a defunct budget carrier established during the Mahinda Rajapaksa administration.

Government spokesman Rajith Senaratne told the EconomyNext magazine this week that Cabinet had agreed to a convene a Presidential Commission of inquiry into Mihin Lanka's operations. The airline, which was amalgamated into SriLankan Airlines (UL, Colombo Int'l) late last year, ended its near ten-year lifespan with debts of over LKR6.14 billion rupees (USD40 million) owed to, among others, the People's Bank (LKR4.86 billion) and SriLankan Airlines (LKR1.7 billion).

During the same cabinet meeting, it was agreed that government should absorb Mihin Lanka's debts.

While the carrier is now expected to be liquidated in the coming weeks, government is also considering selling its operator's licenses and certificates to interested third parties looking to establish a new Sri Lanka-based carrier.